Drug overbilling, Medicare, Medicaid, TRICARE, FEHB, Whistleblowing

The authors are former prosecutors who now represent whistleblowers / Renée Brooker (former Assistant Director for Civil Frauds) reneebrooker@finchmccranie.com (202) 288-1295 / Eva Gunasekera (former Senior Counsel for Health Care Fraud) eva@finchmccranie.com

The Department of Justice needs whistleblowers to report fraud involving drug pricing overbilling in the Medicare, Medicaid, TRICARE and FEHB programs.

Rite Aid Must Face Whistleblower Suit Alleging Drug Overbilling

Posted April 1, 2019, 1:02 PM

Court denies Rite Aid’s motion to dismiss

Misrepresentations allegedly led to inflated payments

Pharmacist and whistleblower Azam Rahimi may proceed with claims that Rite Aid Corp. violated the False Claims Act by overbilling government health-care programs for prescription drugs, a federal court said.

Rahimi adequately alleges a scheme under which Rite Aid charged Medicare, Medicaid, and TRICARE prices that significantly exceeded those it routinely offers other customers through a savings program, Judge Stephen J. Murphy of the U.S. District Court for the Eastern District of Michigan said.

Rite Aid allegedly charged the government more than the “usual and customary charge” it bills the general public for generic drugs while misrepresenting to those programs that it was complying with that price ceiling, the court said.

The court said Rahimi’s complaint has adequate detail to support a representative claim because it includes such details as claim number, date of purchase, and product description, the court said.

Susman Godfrey LLP represented Rahimi. Dickinson Wright PLLC represented Rite Aid.

The case is United States ex rel. Rahimi v. Rite Aid Corp., E.D. Mich., No. 11-cv-11940, 3/30/19

To contact the reporter on this story: Daniel Seiden in Washington at dseiden@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com